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EMV Transition Lagging, Survey Says

A new American Express® survey reveals that more than a third of U.S. small businesses have not yet upgraded their point-of-sale systems to be EMV® capable, even though they say protecting their operations from the threat of payment card fraud is a major concern.

The American Express EMV Preparedness Survey, conducted last October and released in late February, reports that 67 percent of small business owners surveyed indicated that protecting against and preventing card fraud is very important to running their businesses. More than half (52 percent) felt that they are at higher risk for payment card fraud than larger businesses, but almost as many said a lack of money to invest in fraud prevention or a lack of access to experts who can assist them as the biggest reasons why they are not yet EMV compliant.

Even with an apparent understanding of the risks they face, 37 percent of the surveyed small merchants said they either have not decided whether to upgrade their payment terminals or do not plan to do so. Fifty-seven percent gave the cost of obtaining EMV-capable terminals as the main reason for their decision.

“Fraud is a growing problem and the move to EMV is an important step towards stemming payment card fraud in the U.S.,” said Anré Williams, President, Global Merchant Services, American Express, in a prepared statement. “Unfortunately, many small merchants do not know about EMV or what they need to do to take advantage of it.”

EMV smartcard technology is already in use worldwide. It enhances the security of payment transactions by storing encrypted data on a microchip embedded in a payment card and by authenticating each transaction. Retail point-of-sale systems must be equipped with the technology required to read and communicate with the chip.

American Express is providing financial and educational assistance with its Small Merchant EMV Assistance Program, a $10 million national program. The program, which runs through April 30, 2015, gives eligible merchants a $100 Reward Card to help defray the cost of upgrading to EMV chip-enabled point-of-sale systems, which are available from payment processors like TransFirst®.

“We know from speaking with our smallest merchants that they are very busy wearing the many hats of a small business owner and running their day-to-day business to focus on how to most effectively fight fraud,” notes the American Express website. “We want to help you make your customers feel safe when they are paying with a card. That’s good for your business, your customers and the industry overall.”

The program will also help retailers comply with the American Express Fraud Liability Shift (FLS) policy. Effective October 1, 2015, liability for certain types of fraudulent transactions will transfer away from the party that has the most secure form of chip card technology. In other words, if a fraudulent transaction occurs at a business that was not EMV capable, that business will be held liable. U.S. fuel merchants will have until October 2017 before the FLS takes effect for transactions generated from automated fuel dispensers.

If your business is not yet able to process EMV transactions, now’s the time for action. By planning ahead and anticipating the October liability shift, you can help protect both your livelihood and your customers from payment card fraud and its financial fallout. Get started by talking to a TransFirst representative to learn about your options.

EMV is a registered trademark or trademark of EMVCO LLC in the United States and other countries. www.emvco.com

Beth Longware Duff is a professional editor and award-winning writer whose work on a wide variety of topics has been published in print and electronic media. She currently writes on a range of subjects related to electronic payment processing and small business for TransFirst.